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The Situation of the Health Care Debate

A Harvard Law student wrote a worthwhile post on Law & Mind a few weeks ago about some of the dynamics behind the health care debate. Here is an excerpt.

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How should an institution inspire collective action? What’s the best strategy? The conventional wisdom is that to solve a collective problem, the institution should reward contributors and punish free-riders. To prevent people from littering, fine them; to induce people to donate to charity, reward them; to move people to invent, lure them with intellectual property . . . . The implicit reasoning is that the typical human agent is a rational wealth-optimizer who won’t contribute to a public good unless he or she is incentivized to do. Yet, . . . the rational actor model isn’t an accurate depiction of human nature. Just as the average person doesn’t make the “rational choice” in an ultimatum bargain, the average person doesn’t jump to contribute to a public good on account of a mere carrot or stick. The conventional wisdom—that the optimal solution for the collective action dilemma is incentive-based—is a gross oversimplification; the almighty incentive is only one aspect of a rich, complex puzzle. Nonetheless, the conventional solution is unquestioned in our popular discourse regarding collective action.

Before exploring Professor Kahan’s theory, though, consider a recent example of the conventional wisdom’s influence on public discourse from an article in Slate entitled, “The Senator’s Dilemma,” published last week. There, Christopher Beam argues that the Democratic Party’s strategic stance with respect to health care reform can be viewed as a classic collective action problem. Although Beam’s characterization of the problem is surely correct, his policy prescription is conventional.